Bengaluru -Undiminished Returns

Bengaluru remains the Silicon Valley of India and the real estate market in the city clearly reflects the trend. The change in property supply and demand has moved to tangential areas which are in close proximity to the IT corridors. Huge buyer interest was witnessed all along the information technology dominated areas of Banerghatta Road, Whitefield, Sarjapur Road and HSR Layout.

Infrastructure has been a large driver of real estate in the city. The intial trigger for a movement towards Marthahalli was the long commute and enhanced travel time because of weak road infrastructure. The improvement in transport corridors in East Bengaluru saw the Entire IT corridor hotting up from the real estate perspective. Residential occupancy rather than mindless investment is indicated by the fact that rental values too have registered a rise in East Bengaluru areas.

Areas with future potential such as Hebbal in North Bengaluru have been among the top 10 residential localities by supply and demand in Bengaluru. However, rental value, which is a clear indicator of end user demand, has dropped in Hebbal where infrastructure issues have been there. Since it is a newly developing corridor, infrastructure is still evolving and rental demand is expected to go up as the quality of services picks up.

There has been an increase in sale of property on Bannerghatta Road. This has led to a rise in average capital values along the stretch but it remains a high demand area, nevertheless. Robust rental demand has kept the top 10 most in demand localities across the city. However, the large number of properties in the stretch away from the city has led to a drop in average rental values.

The Metro is expected to dramatically impact values in Bengaluru city. Areas such as Banshankari, Yeshwantpur, Indiranagar and the Mysore Road are expected to benefit significantly. Since Bengaluru does not have zoned development, this metro march will impact both residential and commercial property.

Retail space too has been performing well in well in newly evolving residential hubs. This trend is expected to continue as the city maintains a youthful lifestyle led by its young professional workforce. The demand for lifestyle and luxury apartments as well as high end row houses and villas in the suburbs and peripheral areas are expected to continue in 2012. Both commercial and retail property is expected to remain unchanged if external situations remain the same.